Gold price drops to Rs126,000 per tola in Pakistan

• Price of gold drops by Rs200 to Rs126,000 per tola.
• Bullion rates are around Rs1,500 below cost compared to Dubai market.
• Silver prices remain unchanged at Rs1,450 per tola.

KARACHI: Contrary to the trend in global markets, gold prices in Pakistan recorded meagre losses on Tuesday.

Gold was down by Rs200 at Rs126,000 per tola and decreased by Rs171 to Rs108,025 per 10 grams.

The rates of gold were Rs126,200 per tola and Rs108,196 per 10 grams on Monday.

Cumulatively, the yellow metal lost Rs100 per tola in the local market during the week that ended on January 8.

However, it is pertinent to mention that the gold rates in Pakistan are around Rs1,500 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,450 per tola and Rs1,243.14 per 10 grams today.

Gold gains in international market

Gold prices climbed for a third session as the dollar and Treasury yields retreated ahead of Federal Reserve Chair Jerome Powell's nomination hearing as bets grew for a quicker pace of US interest rate hikes.

Powell pledged "to prevent higher inflation from becoming entrenched" in comments prepared for delivery at his hearing on Tuesday before the Senate Banking Committee for a second four-year term at the helm of the Fed.

Spot gold rose 0.3% to $1,806.32 per ounce. US gold futures rose 0.5% to $1,807.80.

"While risk-on sentiment normally is negative for gold, rising oil prices and concerns that US inflation might stay higher for longer are keeping the gold price above the $1,800/oz mark," UBS analyst Giovanni Staunovo said.

Gold is often seen as a hedge against oil-led inflation, while higher interest rates increase the opportunity cost of holding non-yielding bullion.

— With additional input from Reuters